Next week’s South Africa-China Economy and Trade Association (SACETA) job fair plans to bring together one hundred enterprises, who hope to bring along 1 000 jobs to the country’s jobless youth.
According to Statistics South Africa, SA’s unemployment rate climbed to 35.3% in the fourth quarter of 2021, up from 34.9% in the previous period – the highest jobless rate since comparable data began in 2008.
According to the Quarterly Labour Force Survey of the first quarter of 2021, young people are still struggling in the South African labour market, with the official unemployment rate for last year standing at between 32.6% and 46.3% among those aged from 15 to 34 years.
The SA-SACETA job fair taking place next Thursday at the Gallagher Conference Centre in Midrand – to be addressed by Department of International Relations and Cooperation Deputy Minister Alvin Botes, Employment and Labour Minister Thulas Nxesi, Chinese ambassador to South Africa Chen Xiaodong, SACETA vice-president Chen Longjian and Huawei South Africa CEO Fan Wen, CEO – has set a target of offering 1000 jobs to unemployed South Africans, largely the youth.
This, as 100 blue chip Chinese companies based in South Africa have set a target of offering close to 20 000 jobs to locals in the next three years.
Plethora of positive impacts
Commenting on the SA-SACETA initiative, University of Johannesburg economics professor Peter Baur said: “These prospects are good and create all kinds of positive impacts – especially through the multiplier process.
“This means that the income earned, will have a far larger impact on the economy. Income always translates into savings, which may become investment in the future. Such income and spending relationship, will positively stimulate business in other sectors.
“The challenge is to have an efficient transmission mechanism that allows investment to translate into jobs, which translates into growth.”
Baur said labour market regulation, coupled with surging costs of energy and food, plus low economic growth levels, present further challenges for investors, which in turn impacts youth unemployment.
Quoting trading economics figures, Baur added: “Due to the relatively low economic growth rates – approximately 1.2% from December 2021 – there is little chance that many young people leaving school, finding jobs in the near future.
“Consumer confidence is already under pressure. By coupling this with the increasing energy costs and a food price inflation of 6.4%, many of these young people are going through both an emotional pressure – feel that they are not good enough – and a social stigmatism o not been able to contribute towards the household income.”
There is also a problem within youth unemployment of not finding work to meet skills levels.
“While having a tertiary qualification may help to find a job – considering household poverty and growing income inequality – the option of completing a tertiary education is even further out of reach for many.
“My concern is that the youth who struggle to enter the labour market and are subsequently forced into poverty, may also impact households through the growing dependency burden.
“The dependency burden, impacts the economy in several ways, the most important being the loss on household savings – impacting household’s years down the line as the current labour force is retired, without much savings to support old age.”
This lack of savings translates to a lack of meaningful contributions to the economy, as well as putting strain on those already in retirement.
In addition, retirement prospects for the unemployed youth remains dire.
“This adds to the political pressure too, as young people seek an acceptable explanation for their current situation.
“The impact is long-term, especially as this loss of productivity, which translates into a loss of income, might never be consolidated in the future.”